Risk sales see mixed growth in new year

DEXX&R has released the latest Life Analysis Report based on data for the 12 months ending March 2023. The report includes data on all risk businesses issued by life companies from their statutory funds.

The report found total individual risk new premiums increased by 0.4 per cent in the year to March 2023 to $1.4 billion.

Total risk in-force premium increased by 3.0 per cent during the year ending March 2023, up from the $16.0 billion recorded in March 2022 to $16.5 billion in March 2023.

For lump sum premiums, new business sales for the year ending March 2023 were down 1.7 per cent to $960.7 million from the $977.3 billion recorded in the year to March 2022.

Among the top five companies, TAL recorded an increase of 2.5 per cent in individual lump sum business to $161 million.

AIA Australia recorded an 11.7 per cent increase to $126.6 million over the year to March 2023.

“During the March quarter, individual lump sum new premiums decreased by 9.9 per cent to $221 million, $24 million less than the $245 million recorded in December 2022 quarter,” DEXX&R said.

“March quarter sales of $221 million were 0.7 per cent lower than the $222 million recorded in the March 2022 quarter.

The DEXX&R attrition rate for lump sum discontinuances for premium value over time had found that it was slightly higher at 9.6 per cent in March 2023 when compared to the 9.3 per cent attrition rate at March 2022.

Meanwhile, disability income new business increased by 5.6 per cent to $419 million over the year to March 2023, up from the $396 million recorded in the 12 months to March 2022, according to the report.

One of the top five companies recorded an increase in disability income new business over the 12 months to March 2023 with MLC recording an increase of 6.7 per cent to $95 million during the year.

However, disability income new business in the March 2023 quarter of $95 million was down 13.9 per cent from the $111 million recorded in the December 2022 quarter. March 2023 quarter sales were 1.3 per cent lower than the $97 million recorded in the March 2022 quarter.

The DEXX&R attrition rate for disability income business increased for the second year, up from the 9.4 per cent recorded in March 2022 to 10.1 per cent in March 2023.

“Discontinuances remain at historically low levels indicating that notwithstanding the small increase during the year to March 2022, retention remains at a higher level than that applicable over most of the past 10 years,” DEXX&R said.

“This trend is expected to continue as the terms and conditions offered by pre-APRA intervention products are significantly more favourable than those offered by current on sale products.”

When analysing the total in force group value, risk premium increased by 2.7 per cent from $6.8 billion in March 2022 to $7.0 billion over the 12 months to March 2023.

Total in-force business (individual and group) written by life companies increased over the year by 3.0 per cent to $16.5 billion.

“The group risk market is dominated by premiums received for the provision of default cover for super funds,” DEXX&R said.

“While the Protecting Your Super measures have meant that fewer members have default cover, total premium received has continued to increase as the result of re-pricing of existing benefits.”